06-Nov-2026 08:14:47
JPM on Hindalco ; OW, TP Rs 1165
Novelis posted an in-line 2Q with Adj EBITDA (excl insurance recovery) growing 11% YoY to $469mn. Net debt to EBITDA increased QoQ to 4.7x (vs. 1Q at 4.5x) but management reiterated that 4QFY27 will see a decline to 4x & a return to positive free cash flow (capex slowdown, WC release). Bay Minette commissioning remains on track with first coil produced in Sep-2026. Oswego fire insurance recovery is also progressing with 1H at $519mn and guidance is for $900mn by end FY27 and a total of $1.3bn by next year. Novelis is still navigating tariff headwinds with 2Q seeing a $78mn impact led by an increase in Canadian shipments from Kingston to meet customer requirements at U.S. Oswego (where supply chain is gradually normalizing). This will ease by end FY27 as Novelis shifts more production to U.S. Novelis also announced the departure of its CFO (effective mid-Jan 2027) & co is yet to announce a replacement
HINDALCO INDUSTRIES LTD